QBE Insurance Group (ASX:QBE) released the Macquarie Australian Investment Conference presentation on Wednesday and provided a trading update for Q1 2015. QBE expects to achieve FY15 guidance and targets to grow its dividend in the next few years.
A summary of QBE's presentation:
The company recapped its 2014 financial performance and its focus for the next 12 months. The company cited many positive gains in its business over the year. QBE is a top 20 global P&C insurer and is large enough to influence the sector but small enough to remain flexible and nimble. The company did not report any life insurance or external asset management complexities. The company operates in 38 countries and has leading industry positions in Australia and in Lloyd’s/London markets. It also has strong growth in emerging markets, with 13 per cent of Group GWP in these emerging markets. The largest market for the company is in North America, accounting for 32 per cent of its business.
For its future prospects, QBE noted that its underwriting remediation efforts have mostly been completed in North America and Europe. Its attritional claims ratio will remain a key focus for the company in the future. Its reinsurance external program has been restructured to reduce volatility. It also sold its Argentine workers’ compensation business in February of 2015. Its financial strength stabilized in 2014, with tangible capital increasing materially. Debt to equity and debt to tangible equity has been reduced. In its operations, it has created a scalable and centralised operating model in the Philippines. Its expense and claims procurement savings are on track and it has introduced further expense initiatives that have begun consideration. QBE also cited a significant reset of Group Executives. Its Senior Executives have had a 30 per cent refresh rate over the past 2 years.
Shares of the company are up 17.5c, or 1.28 per cent, at $13.84 per share around 3:42pm on Thursday. QBE has advanced 20.83 per cent in the last 12 months and 23.42 per cent so far this year.
Author: Simon Herrmann
May 07, 2015
Simon is a financial analyst at independent research firm Wise-owl specialised in small-mid cap growth opportunities and ethical investment opportunities. Simon's aim is to disrupt the cliché approach to investment decision making as he believes that socially and environmentally responsible behaviour is a necessity to long-term wealth creation. Simon has a deep fundamental understanding of the global financial landscape and has compiled 300+ research reports, valuations and corporate appraisals. Simon is commonly featured in major media outlets and his research is published weekly in The Australian.